[Federal Register Volume 81, Number 191 (Monday, October 3, 2016)]
[Notices]
[Pages 68003-68005]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-23767]


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DEPARTMENT OF EDUCATION


Annual Notice of Interest Rates for Federal Student Loans Made 
Under the William D. Ford Federal Direct Loan Program Prior to July 1, 
2013

AGENCY: Federal Student Aid, Department of Education.

ACTION: Notice.

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    Catalog of Federal Domestic Assistance (CFDA) Number: 84.268.


DATES: This notice is effective October 3, 2016.
SUMMARY: In accordance with section 455(b)(10) of the Higher Education 
Act of 1965, as amended, (HEA), (20 U.S.C. 1087e(b)(10)) the Chief 
Operating Officer for Federal Student Aid announces the interest rates 
for loans made under the William D. Ford Federal Direct Loan (Direct 
Loan) Program prior to July 1, 2013. For loans that have a variable 
interest rate, the rates announced in this notice are in effect for the 
period July 1, 2016 through June 30, 2017. The Chief Operating Officer 
takes this action to give notice of Direct Loan interest rates to the 
public.

FOR FURTHER INFORMATION CONTACT: Rene Tiongquico, U.S. Department of 
Education, 830 First Street NE., 11th Floor, Washington, DC 20202. 
Telephone: (202) 377-4270 or by email: [email protected].
    If you use a telecommunications device for the deaf (TDD) or a text 
telephone (TTY), call the Federal Relay Service (FRS), toll free, at 1-
800-877-8339.
    Individuals with disabilities can obtain this document in an 
accessible format (e.g., Braille, large print, audiotape, or compact 
disc) on request to the contact person listed under FOR FURTHER 
INFORMATION CONTACT.

SUPPLEMENTARY INFORMATION: Section 455(b) of the Higher Education Act 
of 1965, as amended (HEA) (20 U.S.C. 1087e(b)), specifies the interest 
rates charged to borrowers for Federal Direct Subsidized Stafford/Ford 
Loans (Direct Subsidized Loans), Federal Direct Unsubsidized Stafford/
Ford Loans (Direct Unsubsidized Loans), Federal Direct PLUS Loans 
(Direct PLUS Loans), and Federal Direct Consolidation Loans (Direct 
Consolidation Loans), collectively referred to as ``Direct Loans.'' The 
interest rates for Direct Loans may be variable or fixed.

Variable-Rate Direct Loans

    Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS 
Loans that were first disbursed before July 1, 2006, and Direct 
Consolidation Loans for which the application was received before 
February 1, 1999, have variable interest rates that are determined each 
year in accordance with formulas specified in section 455(b) of the 
HEA. The variable interest rate formula that applies to a particular 
loan depends on the date of the first disbursement of the loan or, for 
some Direct Consolidation Loans, the date the application for the loan 
was received. The variable rates are determined annually and are 
effective for each 12-month period beginning July 1 of one year and 
ending June 30 of the following year.
    Except for Direct PLUS Loans that were first disbursed before July 
1, 1998, the variable interest rates for most types of Direct Loans are 
based on formulas that use the bond equivalent rates of the 91-day 
Treasury bills auctioned at the final auction held before June 1 of 
each year, plus a statutory add-on percentage. In each case, the 
calculated rate is capped by a maximum interest rate. The bond 
equivalent rate of the 91-day Treasury bills auctioned on May 31, 2016, 
which is used to calculate the interest rates on these loans, is 0.345, 
rounded up to 0.35 percent.
    The interest rate for Direct PLUS Loans that were first disbursed 
on or after July 1, 1994, and before July 1, 1998, is based on the 
weekly average of the one-year constant maturity Treasury yield, as 
published by the Board of Governors of the Federal Reserve System on 
the last day of the calendar week ending on or before June 26 of each 
year, plus a statutory add-on percentage. The calculated rate is capped 
by a maximum interest rate. The weekly average of the one-year constant 
maturity Treasury yield published on June 27, 2016, which is used to 
calculate the interest rate on these loans, is 0.55 percent.

Charts 1 Through 4 in This Notice Show the Interest Rates for Variable-Rate Direct Loans That Are in Effect for the Period July 1, 2016 Through June 30,
                                                                          2017
--------------------------------------------------------------------------------------------------------------------------------------------------------
                         Cohort                                             Index rate                Margin                        Total rate
---------------------------------------------------------                -------------------------------------------------------------------------------
                                                           Maximum rate                     In-school,                      In-school,
   First disbursed on  or after        First disbursed          (%)       91-Day  T-Bill      grace,         All other        grace,         All other
                                           before                            rate (%)        deferment      periods (%)    deferment (%)    periods (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
7/1/1994..........................  7/1/1995............            8.25            0.35            3.10            3.10            3.45            3.45
7/1/1995..........................  7/1/1998............            8.25            0.35            2.50            3.10            2.85            3.45
7/1/1998..........................  7/1/2006............            8.25            0.35            1.70            2.30            2.05            2.65
--------------------------------------------------------------------------------------------------------------------------------------------------------


                       Chart 2--Variable-Rate Direct PLUS Loans Interest Rates in Effect for the Period 7/1/2016 Through 6/30/2017
--------------------------------------------------------------------------------------------------------------------------------------------------------
                              Cohort                                                             Index rate
-------------------------------------------------------------------                --------------------------------------
                                                                     Maximum rate                       1-Year constant     Margin (%)    Total rate (%)
      First disbursed on  or after        First disbursed  before         (%)         91-Day T-Bill    treasury maturity
                                                                                         rate (%)             (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
7/1/1994...............................  7/1/1998.................            9.00  .................               0.55            3.10            3.65
7/1/1998...............................  7/1/2006.................            9.00               0.35  .................            3.10            3.45
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 68004]]


 Chart 3--Variable-Rate Direct Subsidized and Direct Unsubsidized Consolidation Loans Interest Rates in Effect for the Period 7/1/2016 Through 6/30/2017
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                  Cohort                                                  Index rate           Margin                  Total rate
---------------------------------------------------------------------------             ----------------------------------------------------------------
                                                                            Maxmum rate                In-school,                In-school,
                                                                                (%)       91-Day  T-     grace,     All other      grace,     All other
        First disbursed on or after              First disbursed before                   Bill rate    deferment   periods (%)   deferment   periods (%)
                                                                                             (%)          (%)                       (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
7/1/1994...................................  7/1/1995.....................         8.25         0.35         3.10         3.10         3.45         3.45
7/1/1995...................................  7/1/1998.....................         8.25         0.35         2.50         3.10         2.85         3.45
7/1/1998...................................  10/1/1998....................         8.25         0.35         1.70         2.30         2.05         2.65
--------------------------------------------------------------------------------------------------------------------------------------------------------
First disbursed on or                        Application received.........
after                                        before.......................
--------------------------------------------------------------------------------------------------------------------------------------------------------
10/1/1998..................................  10/1/1998....................         8.25         0.35         1.70         2.30         2.05        2.65%
--------------------------------------------------------------------------------------------------------------------------------------------------------
Application received on or                   Application received.........
after                                        before.......................
--------------------------------------------------------------------------------------------------------------------------------------------------------
10/1/1998..................................  2/1/1999.....................         8.25         0.35         2.30         2.30         2.65         2.65
--------------------------------------------------------------------------------------------------------------------------------------------------------


                Chart 4--Variable-Rate Direct PLUS Consolidation Loans Interest Rates in Effect for the Period 7/1/2016 Through 6/30/2017
--------------------------------------------------------------------------------------------------------------------------------------------------------
                            Cohort                                                 Index rate                  Margin                  Total rate
--------------------------------------------------------------             -----------------------------------------------------------------------------
                                                                                            1-Year
                                                                 Maximum     91-Day  T-    constant    In-school,                In-school,
     First disbursed on or after       First disbursed before    rate (%)    Bill rate     treasury      grace,     All other      race,      All other
                                                                                (%)        maturity    deferment   periods (%)   deferment   periods (%)
                                                                                             (%)          (%)                       (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
7/1/1994............................  7/1/1998...............         9.00  ...........         0.55         3.10         3.10         3.65         3.65
7/1/1998............................  10/1/1998..............         9.00         0.35  ...........         3.10         3.10         3.45         3.45
--------------------------------------------------------------------------------------------------------------------------------------------------------
First disbursed on or after           Application received
                                       before.
--------------------------------------------------------------------------------------------------------------------------------------------------------
10/1/1998...........................  10/1/1998..............         9.00         0.35  ...........         3.10         3.10         3.45         3.45
--------------------------------------------------------------------------------------------------------------------------------------------------------
Application received                  Application received...
on or after                           before.................
--------------------------------------------------------------------------------------------------------------------------------------------------------
10/1/1998...........................  2/1/1999...............         8.25         0.35  ...........         2.30         2.30         2.65         2.65
--------------------------------------------------------------------------------------------------------------------------------------------------------

Fixed-Rate Direct Loans

    Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS 
Loans first disbursed on or after July 1, 2006 and before July 1, 2013, 
and Direct Consolidation Loans for which the application was received 
on or after February 1, 1999, have fixed interest rates.
    Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS 
Loans first disbursed on or after July 1, 2006 and before July 1, 2013 
have various fixed interest rates that are specified in section 
455(b)(7) of the HEA. These fixed rates are shown in Chart 5.
    Direct Consolidation Loans for which the application was received 
on or after February 1, 1999 and before July 1, 2013 have a fixed 
interest rate that is determined in accordance with sections 
455(b)(6)(D) and 455(b)(7)(C) of the HEA. The fixed interest rate for 
these Direct Consolidation Loans is equal to the weighted average of 
the loans that are consolidated, rounded up to the nearest higher \1/8\ 
of one percent, but the rate may not exceed 8.25 percent.
    Chart 5 shows the fixed interest rates for Direct Subsidized Loans, 
Direct Unsubsidized Loans, and Direct PLUS Loans first disbursed before 
July 1, 2013, and for Direct Consolidation Loans for which the 
application was received on or after February 1, 1999 and before July 
1, 2013.

  Chart 5--Fixed-Rate Direct Subsidized, Direct Unsubsidized, Direct PLUS Loans, and Direct Consolidation Loans
                            First Disbursed On or After 7/1/2006 and Before 7/1/2013
----------------------------------------------------------------------------------------------------------------
                                     Student grade    First disbursed on    First disbursed
            Loan type                    level             or after             before             Rate (%)
----------------------------------------------------------------------------------------------------------------
Subsidized......................  Undergraduates....  7/1/2006..........  7/1/2008..........  6.80
Subsidized......................  Undergraduates....  7/1/2008..........  7/1/2009..........  6.00
Subsidized......................  Undergraduates....  7/1/2009..........  7/1/2010..........  5.60
Subsidized......................  Undergraduates....  7/1/2010..........  7/1/2011..........  4.50
Subsidized......................  Undergraduates....  7/1/2011..........  7/1/2013..........  3.40
Subsidized......................  Graduate/           7/1/2006..........  7/1/2012..........  6.80
                                   Professional
                                   Students.
Unsubsidized....................  All...............  7/1/2006..........  7/1/2013..........  6.80

[[Page 68005]]

 
PLUS............................  Parents and         7/1/2006..........  7/1/2013..........  7.90
                                   Graduate/
                                   Professionals.
                                                     ----------------------------------------
                                                          Application     Application
                                                         received on or    received before.
                                                             after
                                                     ----------------------------------------
Consolidation...................  N/A...............  2/1/1999..........  7/1/2013..........  Weighted average
                                                                                               of rates on the
                                                                                               loans being
                                                                                               consolidated,
                                                                                               rounded to
                                                                                               nearest higher \1/
                                                                                               8\ of 1 percent,
                                                                                               not to exceed
                                                                                               8.25%
                                                      7/1/2013..........  ..................  Weighted average
                                                                                               of rates on the
                                                                                               loans being
                                                                                               consolidated,
                                                                                               rounded to
                                                                                               nearest higher \1/
                                                                                               8\ of 1 percent
----------------------------------------------------------------------------------------------------------------


    Note: Interest rates for Direct Subsidized Loans, Direct 
Unsubsidized Loans, and Direct PLUS Loans first disbursed on or 
after July 1, 2013 and before July 1, 2016 are published in earlier 
Federal Register notices, as follows:

     For loans first disbursed on or after July 1, 2013, and 
prior to July 1, 2014, see 78 FR 59011.
     For loans first disbursed on or after July 1, 2014, and 
prior to July 1, 2015, see 79 FR 37301.
     For loans first disbursed on or after July 1, 2015, and 
prior to July 1, 2016, see 80 FR 42488.
     For loans first disbursed on or after July 1, 2016, and 
prior to July 1, 2017, see 81 FR 38159.
    Electronic Access to This Document: The official version of this 
document is the document published in the Federal Register. Free 
Internet access to the official edition of the Federal Register and the 
Code of Federal Regulations is available via the Federal Digital System 
at: www.gpo.gov/fdsys. At this site you can view this document, as well 
as all other documents of this Department published in the Federal 
Register, in text or Adobe Portable Document Format (PDF). To use PDF 
you must have Adobe Acrobat Reader, which is available free at the 
site.
    You may also access documents of the Department published in the 
Federal Register by using the article search feature at: 
www.federalregister.gov. Specifically, through the advanced search 
feature at this site, you can limit your search to documents published 
by the Department.
    Program Authority: 20 U.S.C. 1087 et seq.

    Dated: September 27, 2016.
James W. Runcie,
Chief Operating Officer, Federal Student Aid.
[FR Doc. 2016-23767 Filed 9-30-16; 8:45 am]
 BILLING CODE 4000-01-P